3 September 2004

G-Secs drop - Rupee unchanged
Mumbai: The rupee closed unchanged from its previous levels, ending at 46.32 per dollar.

Forwards Market: The six-month premium ended at 2.19 per cent (2.28 per cent) and the premium for one year ended at 1.87 per cent ( 2 per cent).

G-Secs: The prices fell with the 7.37 per cent 2014 paper closed lower at Rs.109.60 at 6.06 per cent YTM, as against Wednesday's closing levels of Rs.110.30 (5.95 per cent YTM). The 7.38 per cent 2015 paper closed at Rs.109.60 (6.18 per cent YTM), as against its previous closing at Rs.110.30.

Call Rates: Easy at around 4.25 per cent levels in the inter-bank market.

RBI allows banks to shift securities
Mumbai: Providing some relief to the commercial banks, against the hardening yields in the domestic debt markets, the Reserve Bank of India has allowed them to transfer securities in excess of the prescribed 25 per cent limit, in the Held to Maturity category (HTM).

However, the apex bank has emphasised, in a circular issued to commercial banks here on Thursday, that they may do this only when the excess comprises only of SLR securities, and when the total SLR securities held in the HTM category is not more than 25 per cent of their Demand and Time Liabilities (DTL) as on the last Friday of the second preceding fortnight.

To enable the above, as a one-time measure, banks may shift SLR securities to the HTM category any time, once more, during the current accounting year. Such shifting should be done at the acquisition cost, book value or market value on the date of transfer, whichever is the least, and the depreciation, if any, on such transfer should be fully provided for, RBI has said. The non-SLR securities held as part of HTM may remain in that category. No fresh non-SLR securities are permitted to be included in the HTM category.

The central banks latest move is in light of representations received from banks that the existing guidelines of classification of investments should be reviewed with a view to bringing them in alignment with international practices and current state of risk management practices in India, taking into account the unique requirement of maintenance of statutory reserve requirement of 25 per cent of DTL.

Dhanalakshmi Bank to disburse Rs.51 crore in micro credit
Kochi: The Thrissur-based Dhanalakshmi Bank has set apart Rs.51 crore for micro credit disbursal for the current year. In the initial year of launch, the bank was able to extend credit to the tune of Rs.47 lakh to self help groups(SHGs). The bank now extends assistance to around 17,500 members belonging to 880 SHGs covering a total outlay of Rs.11.45 crore.

The bank had set up a Micro Credit Cell at the corporate office in 2002, to give an added thrust to lending activities under the scheme as well as to monitor its progress, a press release from the bank has said.

This has been accomplished by extending credit to Self Help Groups for various activities undertaken by its members. These activities are coordinated through micro credit Field Officers and Agricultural Extension Officers. The bank has appointed Prof. V.J. Pappoo, former Pro-Vice Chancellor of Calicut and Cochin Universities as a consultant for overseeing the overall activities.

There have been no NPAs under this programme.and the recovery has been 100 per cent, the bank said. The Bank retains the number one position among Kerala-based banks in micro credit finance, the press release added.

ICICI Bank launches 'Kisan Loan Card'
Mumbai: ICICI Bank has launched the 'ICICI Bank Kisan Loan Card', which will enable farmers to avail themselves of loans through an electronic card with easy access to withdrawal of cash through the ATMs.

The ICICI Bank Kisan Loan Card has been launched in Devarapalli in interior Andhra Pradesh in association with the Tobacco Board, Ministry of Commerce, Government of India, said a press release.

ICICI Bank said that with this Kisan Loan Card, it had leveraged technology to bring to farmers low cost loans and easy access to credit. Over 6,000 farmers affiliated to the Tobacco Board in Andhra Pradesh across four tobacco regions are expected to benefit from this card.

In addition to the cash loan through the card, the farmer can also avail himself of crop loans from ICICI Bank to procure fertilisers, seeds, pesticides, diesel etc, the release said. The bank has installed four low cost ATMs especially designed for rural India in Devarapalli, Koyyalagudem and Jangareddygudem.

These ATMs will now enable farmers to have access to money 24 hours a day through cash withdrawals as against withdrawing from the local bank branch.

Finolex NCD gets an upgrade from Crisil
Mumbai: CRISIL has upgraded the rating of Finolex Industries Ltd's Rs.50 crore NCD issue from AA to AA+. The upward revision in the rating follows the current upturn in the poly-vinyl chloride (PVC) price cycle. Another determinant has been the cost of the Finolex PVC expansion project that has been halved from Rs.500 crore to Rs.250 crore.

The rating is supported by the company's liquid investments of over Rs.168 crore as of March 31.

2 September 2004

Bond prices rally - Rupee firms up
Mumbai: The rupee closed marginally stronger at 46.32 against the dollar compared to Tuesday's close of 46.36/3550.

Forwards Market: The six-month premium ended at 2.28 per cent (2.41 per cent), while the one-year premium closed at 2 per cent (1.95 per cent).

G-Secs: Bond prices rallied across maturities in the Government securities market on Wednesday. The 10-year benchmark paper, the 7.37 per cent 2014 closed at Rs.110.30. The 7.38 per cent 2018 paper went to a high of Rs.110.30.

Call Rates: remained at 4.25-4.50 per cent in the inter-bank market.

RBI clarification on coins
Thiruvananthapuram: The regional office of the Reserve Bank of India (RBI) has clarified that all coins, including those of 25 paise and 50 paise denominations, are legal tender and will continue to be so.

An official spokesman said here that the clarification was being issued in the context of reports suggesting that shopkeepers, traders, transport undertakings and Government departments were refusing to accept the coins on misplaced belief that they had ceased to legal tender and were not accepted by banks.

SBT bags national award
Thiruvananthapuram: The State Bank of Travancore (SBT) has secured the national award for excellence in lending to the SSI sector during year 2003-04. The Ministry of Small Scale Industries instituted the award for commercial banks, a bank spokesman said here.

The Prime Minister, Dr Manmohan Singh, gave away the award and citation to P. P. Pattanayak, Chief General Manager, SBT, at a function held at Vigyan Bhavan, New Delhi.

Advances made by the bank to the SSI sector, as on March 31 this year, is Rs.724 crore. SBT has five SSI branches in the State at Thiruvananthapuram, Kottayam, Ernakulam, Alappuzha and Thrissur. It has also opened a specialised branch for women at Muhamma in Alappuzha.

Bajaj Allianz to launch unit linked pension scheme
Kolkata: The growing demand for unit-linked insurance plans has prompted Bajaj Allianz Life to introduce a unitised variant of its existing pension product. It will now work towards fresh products, at least one of which will be aimed at women.

The new products introduced by it have helped bring in over Rs.180 crore gross written premium this fiscal.

This has enabled the company to occupy the third slot (among private sector outfits) in the industry on this front, according to IRDA figures pertaining to June 2004.

NHB to fully guarantee mortgage-backed securities
Mumbai: The fledgling secondary market for residential mortgage-backed securities (MBS) is set to get a boost with home loan refinancier National Housing Bank donning the garb of market maker for such securities. An NHB official today said that the bank would fully guarantee the securities and offer two-way quotes.

An MBS is a representative security of a pool of housing loans, usually clubbed and sold by a home loan financier.

NHB has decided to provide 100 per cent guarantee for both principal and interest to investors in MBS.

The guarantee will provide credit enhancement to the MBS structure, helping secure better rating for the instrument and finer pricing for originators, a bank release said.

LIC Housing raises $29.85 m through GDS
Mumbai: LIC Housing Finance Ltd has raised $29.85 million through its maiden issue of Global Depository Shares (GDSs).

The price, which is at a 1.5 per cent premium to the average closing price of the company's shares one week prior to launch date, was fixed at $5.97 per GDS comprising 2 equity shares at a price of Rs.138.368 per equity share of Rs.10 each, said a press release.

LIC Housing has issued five million GDS representing 11.77 per cent of the post offer equity capital of the company aggregating $29.85 million through this offering. The GDS are proposed to be listed on the Luxembourg stock exchange.

CLSA Asia-Pacific markets and Kotak Investment Bank acted as the joint global co-ordinators and book runners for the issue.

1 September 2004

G-Secs recover - rupee unchanged
Mumbai: The domestic currency closed at 46.36/3550 against the dollar almost unchanged from its previous closing on Monday.

Forwards Market: The six-month premium ended at 2.41 per cent (2.45 per cent) and the one-year premium ended at 2 per cent (2.08 per cent).

G-Secs: The benchmark 10-year paper, the 7.37 per cent 2014 ended stronger at Rs.109.25 at a YTM of 6.08 per cent.
Call Rates: At the 4.25 per cent to 4.50 per cent levels in the inter-bank market.

Govt. confers mini-ratna status on Hudco
New Delhi: The Government has conferred the mini-ratna status to the Housing and Urban Development Corporation Ltd (Hudco).

Hudco was incorporated in 1970 as a fully-owned Government company under the Companies Act, 1956, with the main objective of financing housing and urban development projects in the country, and to finance building material industries and setting up of new townships.

In order to achieve these objectives, Hudco finances a variety of housing and urban development projects formulated by the State Housing Boards, Development Authorities and Improvement Trusts.

New India Assurance profits jump 130 per cent
Mumbai: New India Assurance Company Ltd net profit has jumped by 130.47 per cent to touch Rs.590 crore (Rs.256 crore). The company has recorded a gross direct premium of Rs.4, 045.68 crore for the financial year ended 2003-04 as against Rs.3, 921.24 crore in the previous year.

The company has declared a dividend of 45 per cent as against a dividend of 40 per cent in the previous year, said a press release.
Outstanding claims liability increased to Rs.4,380 crore (Rs.3,929 crore). Total assets increased to Rs.17,507 crore (Rs.12,985 crore). Total investments in India were at Rs.7,928 crore (Rs.7,348 crore). General reserves were at Rs.3,843 crore (Rs.3,302.89 crore).

During this period, the gross global premium earned by the company was Rs.4,921. 47 crore, said a press release.

State Bank of Hyderabad hikes housing loan rates
Hyderabad: The State Bank of Hyderabad (SBH) has decided to increase the fixed interest rates on housing loans by 25 basis points across the board.

In a press release here on Tuesday, SBH has said that the fresh interest rates would come into effect from September 1. The new rates would be uniform for any amount of loan, the bank said.

In terms of the revised rates, the interest rate on loans of up to five years would go up to 7.75 per cent from the existing level of 7.5 per cent, on above five to 15 years tenure to 8.5 per cent (8.25 per cent) and on loans of above 15 years to 20 years tenure to 8.75 per cent from the current rate of 8.5 per cent, the bank said.

31 August 2004

Rupee slips and G-Secs drop
Mumbai: The rupee closed marginally weaker at Rs.46.3650/37 against the dollar on Monday, as against Friday's closing at Rs.46.30.

Forwards Market: The six-month premium ending at 2.45 per cent (2.48 per cent) and the premium for one year ending at 2.08 per cent (2.16 per cent).

G-Secs: Bond prices lost close to a rupee across maturities. The 7.38 per cent 2015 dropped to Rs.108.75, while the 10 year benchmark, the 7.37 per cent 2014 paper closed lower at Rs.108.65, with a yield to maturity at 6.14 per cent (6.05 per cent during opening levels).

Call Rates: In the range between 4.25 per cent and 4.50 per cent levels.

SBI hikes fixed home loan rates
Mumbai: The State Bank of India, on Monday has announced a 25 to 50 basis points hike in its fixed home loan rates with immediate effect.

The floating rates remain unchanged for now. The bank said it was done to stabilise the home loan market. According to the revised rates, housing loans with a maturity of up to five years will now cost 8 per cent as against the existing 7.75 per cent. For loans with a maturity of 5-15 years, the new rate is 8.75 per cent (8.25 per cent) and for 15-20 years the new rate is 9 per cent (8.50 per cent).

The bank has decided to extend a `one-time' option to its home loan borrowers, of making a switch over from their present floating rate loans to fixed rate loans, subject to a one-time payment of a 2.75 per cent fee.

State Bank of Travancore revises FCNR rates
Thiruvananthapuram: The State Bank of Travancore (SBT) has announced new interest rates for FCNR deposits in US dollars, pound sterling and euro for periods ranging from one to three years. The new rates would come into being from Monday (August 30).

The new rate for US dollar deposits are 2.05 per cent for one year to less than two years, 2.62 per cent for two years to less than three years, and 3.05 per cent for three years. The rates for pound sterling deposits are 4.99 per cent, 4.98 per cent and 5.03 per cent respectively, while those for euro deposits are 2.04 per cent, 2.42 per cent and 2.74 per cent.

Syndicate Bank to raise Rs.250 crore bond issue
Bangalore: The public sector Syndicate Bank is planning to raise Rs.250 crore for strengthening its Tier Two capital preparatory for the credit expansion during the peak season beginning next month. The bank said that the pricing of the bond issue was not yet decided and would be finalised sometime next month.

In the first quarter of this year, the bank has done 41 per cent more business than the corresponding period of the last financial year. Net profits also showed considerable improvement during the period from Rs.79 crore to Rs.125 crore.

30 August 2004

RBI to set up panels to implement Basel-II norms
New Delhi: The Reserve Bank will set up a steering committee to implement the new stringent international Basel-II norms on capital adequacy by 2006. According to the bank, it will follow a consultative process while implementing Basel-II norms and move in a gradual, sequential and co-ordinated manner.

Towards this end, the RBI is setting up a steering committee, which in turn will have smaller focused sub-groups for each of the three pillars of Basel-II with members representing interests of all stakeholders.

The three pillars of Basel-II, which offer a new set of standards for establishing minimum capital requirements for banking operations, are capital adequacy, supervisory review and market discipline.
According to the RBI, initially all banks would have to at least adopt a standardised approach for credit risk and basic indicator approach for operational risk. After adequate skills were developed, both in banks and at supervisory level, some banks may be allowed to migrate to the internal rating-based approach (IRB).

By March 31, 2005, the banks would have to set aside capital for market risks on securities included in the trading category, open gold position, open foreign exchange position, trading position in derivatives and derivatives entered into for hedging trading book exposures.

Prudential Bank to clear payments up to Rs.20, 000
Hyderabad: The Prudential Co-op Bank Ltd has said that the Reserve Bank of India has given it permission to make payments up to Rs.20, 000 per depositor. After the payments, 92,000 of the 1,40,000 total number of accounts would be closed. The bank has about 1,600 account holders who deposited Rs.1 lakh or more. One third of these account holders have deposited Rs.2 lakh and above.

In a separate release, the Charminar Co-Operative Urban Bank Ltd has asked the depositors, who haven't claimed their money, to submit their claim forms immediately. The depositors have been asked to contact the respective branches for further details.